Global Packaging Company
Capex Strategy Project
Scope
Upon request from the CEO, a team from Weissr Capex performed a Capex Strategy project together with the client’s project team. The project covered over 20 pulp and/or paper mills plus several dozen converting plants, with a combined replacement value exceeding $20 billion.
Business Needs
Understanding Pitfalls: The CEO and his management team, after reading “the Tail that wags the dog,” recognized pitfalls in the capital allocation process historically repeated in the industry.
New Capex Strategy: Gather the “top 30” decision makers to establish a new Capex strategy with detailed site plans.
Common Commitment: Ensure the team’s common commitment to the strategy to guarantee its implementation.
Avoiding Pitfalls: Achieve an understanding of the pitfalls and how to avoid them.
Weissr’s Approach
Comprehensive Cash Flow Model: Established a detailed model including Capex needs, volumes, prices, variable and fixed costs, and an energy model.
Base Alternative: Created a “do nothing” base alternative.
Strategic Initiatives: Developed 30+ large strategic initiatives.
Strategic Alternatives: Created over 100 full-scale strategic alternatives based on combinations of strategic building blocks.
Optimization Tools: Continuously updated product allocation optimization tools to reflect learnings.
Process Integration: Ingrained Weissr® learnings throughout the process.
Client’s Result
Endorsed Strategy: A long-term Recommendation for Action (RfA) was universally endorsed.
Increased Value: The RfA predicted a +40% increase in future discounted cash flow.
Swift Implementation: Strategy implementation began only months after project closure.
Positive Market Reaction: The stock reacted positively to major decisions communicated to the market.
Mindset Shift: Fundamental change in the company’s mindset regarding Capex prioritization.
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